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Ottawa offers Alberta a deal on oilsands emissions

OTTAWA—The type of oilsands developments that emit the most greenhouse gas could be exempt from new federal reviews for major projects—but only if Alberta keeps its cap on emissions from that sector.

The proposed exemption was included in draft regulations published Wednesday that outline which new developments would be subject to federal reviews under Bill C-69, legislation to revamp project assessments in Canada that has been denounced by some industry groups and the Conservative opposition.

Environmental policy advocates slammed the proposal as a failure to place climate change at the heart of the new assessment process, while a leading oil industry association questioned why Ottawa would tie its decision to review certain projects to a political “caveat” like an emissions cap.

Federal Environment Minister Catherine McKenna emphasized that the proposed exemption is open for discussion until the end of May. But she added that it’s “good news” that Alberta Premier Jason Kenney has said there’s no immediate need to lift the cap on oilsands emissions that was created in 2016, even though he said he opposed that cap during the recent election campaign.

“A number of Canadians, including our government, are concerned about emissions from the oilsands,” McKenna said as she left a Liberal caucus meeting on Parliament Hill.

“It is really important that we’re all serious about tackling climate change, and that includes Alberta as well.”

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Under the proposed regulations, Ottawa would exempt new “in situ” oilsands projects in Alberta from federal reviews because the province’s emissions cap for the sector—set at 100 megatonnes per year—is in line with Canada’s climate change framework, which aims to cut greenhouse gas emissions to 30 per cent below 2005 levels by 2030, government officials said during a background briefing Wednesday.

These “in situ” projects use steam to extract oil from the ground, rather than digging it out in an open pit mine. Emissions from these projects nearly quadrupled to 42 megatonnes from 2005 to 2017, when they made up more than half the emissions from Alberta’s oilsands, according to the federal government’s most recent tally of national greenhouse gas emissions.

Nichole Dusyk, a senior federal policy analyst for the Pembina Institute, said Ottawa is backing away from its environmental responsibilities if “in situ” oilsands projects aren’t placed under the new review process.

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“Exempting it because there is a cap misses all of the other impacts that are within federal jurisdiction,” said Dusyk, pointing to potential effects on the habitats of “at-risk” species.

Julia Levin, climate and energy program manager with Environmental Defence, questioned why other emissions-intensive projects like pipelines that don’t cross borders will continue to be exempt from review, when renewable energy projects like certain hydroelectric, wind power and tidal energy facilities will be placed under the new federal assessments.

Like Dusyk, Levin said the regulations should ensure projects with a certain amount of greenhouse gas emissions fall under federal review, so that Ottawa can manage emissions as it strives to hit its targets under the Paris Agreement.

“This was not the place to abdicate responsibility and that is what the government has done,” she said.

For Tim McMillan, president of the Canadian Association of Petroleum Producers, the proposed in situ exemption is another reason to oppose Bill C-69. He said the assessment process is best left with industry-specific regulators and the provinces, and that tying the “in situ” exemption to the oilsands cap brings politics into decisions about what developments should get a federal review.

“It seems like political brinksmanship between the federal government and the provinces, and we think that’s inappropriate,” McMillan said.

The Liberal government introduced Bill C-69 last year and it is currently before the Senate. The legislation creates a new body called the Impact Assessment Agency to lead reviews for major projects instead of leaving the process to regulatory bodies like the National Energy Board, which specialize in certain sectors.

The bill also caps the length of a review at 300 days—not including a new, preliminary phase for consultations and planning—and broadens the scope of factors assessed to include climate change considerations, Indigenous reconciliation and how projects would affect people of different genders.

In a emailed statement Wednesday, McKenna’s spokesperson Sabrina Kim said “every project” in the country will be subject to Canada’s climate change plan, which includes the minimum price on carbon emissions and regulations to limit methane emissions and set standards for cleaner fuel.

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